Comments For Appraisal Under Contract Price

[JTip]

This is the reason I like to take 3 min to review the contract and MLS sheet (to reveal contract price over list and/or unusual concessions), then another 7 min looking for comps in the MLS to support the contract price. 10 min total pro bono.

Now you can determine if the fee offered is worth the obvious headache that will come to fruition.

You have three options:
Accept job,

or ask for a reasonable fee increase for the upcoming additional work supporting your market value because you have determined in your 10 min of research that there will be a problem with the contract price based on your research and you get to deal with unhappy lenders/agents/buyer/seller and you should get paid more because of the extra upcoming work involved,

or simply decline and enjoy life without pain.

I'm an option 3 kind of appraiser.

 

[Tom D]

I would think that there would be some actives or pendings to show my brilliance. And what is the typical sale price/listing price ratio there.

A couple of times i thought, went over listing price, yikes. Well, after really looking around i came in even higher. There were cash purchases driving values higher, few listings.

 

[Tom4value]

Sigh!
Asking price well below contract price. Appraised amount below contract price. Happened to me crap-ton of times over that last several years!

Inventory very low so buyers are offering well above asking to beat out other buyers. I just make a comment that “market data does not support contract price” and leave it at that. Our job is to appraise the property, not the contract price. Lenders are using our appraisal to make sure they are not lending on a house that is not worth what they are lending on.

Buyers are welcome to thank me for not paying too much. If a realtor accuses me of not knowing the market, I point out that they are the one who listed it for less than what I say it is worth. Shuts them up. Play stupid games, win stupid prizes!

 

[DTB]

Sigh!
Asking price well below contract price. Appraised amount below contract price. Happened to me crap-ton of times over that last several years!

Inventory very low so buyers are offering well above asking to beat out other buyers. I just make a comment that “market data does not support contract price” and leave it at that. Our job is to appraise the property, not the contract price. Lenders are using our appraisal to make sure they are not lending on a house that is not worth what they are lending on.

Buyers are welcome to thank me for not paying too much. If a realtor accuses me of not knowing the market, I point out that they are the one who listed it for less than what I say it is worth. Shuts them up. Play stupid games, win stupid prizes!

Agents are not required to list at market value, are they? Sometimes it is a marketing ploy

 

[Dublin ohio]

Speaking of ROVs. First one I have had for years. But it was a bit unusual. It was an "ROV' for the opinion of market rent. Market rent x grm supported OMV. But it wasn't the OMV there were disputing. It was the market rent. So they sent over some rental addresses. Easy reply "All of the rentals provided were outside of the delineated neighborhood stated within the report". Obviously they were using the rental income to get the loan. Not my problem

 

[Zoe]

I would not suggest making that kind of comment.

It is up to the lender to inform a borrower about the right to submit an ROV, and then it is up to the party to decide whether to submit one. The appraisers should not discuss it in the appraisal report.

With VA you do tidewater when you think it won't make contract price. ROV works the same way. It is no big deal with this appraiser. If lender sends them comps that support the contract price, there is nothing wrong with changing appraised value on appraisal. Here is my tidewater notice. You can revise it for ROV request:

"Hi XXXX,

I am working on the above referenced appraisal. Based on preliminary analysis, I need to invoke the Tidewater initiative. Please be advised that the subject property will likely not meet the contract price. In accordance with VA Circular 26-03-11, you are hereby notified and requested to provide any additional information you would like to be considered in the appraisal of the subject property. Please supply any information you would like me to consider within 2 business days as well as a supporting summary and analysis of the information.

Please contact me with any questions you may have.

Sincerely,

XXXX"

You don't have to word it that way on an ROV. You can still go with mission to your client and same mission accomplished.


Okay?

Your staying focused on subject real property rights. Your not showing bias in any way form or fashion.

 

[Zoe]

I'll try. I have not spent much time on it but let's go:

Hi or Dear or just Ms. or Mr XXXX,

I am considering an ROV request.

I am working on the above referenced appraisal.

I am requesting you to provide any additional information you would like to be considered in the appraisal of the subject property. Please supply any information you would like me to consider within 2 business days as well as a supporting summary and analysis of the information.

Please contact me with any questions you may have.

Sincerely,

XXXXX

That is a rough try on a good response to an ROV.

The wording is probably not exactly right, but you have done due diligence in your mission on an ROV if you go down that road.

 

[Dublin ohio]

I'll try. I have not spent much time on it but let's go:

Hi or Dear or just Ms. or Mr XXXX,

I am considering an ROV request.

I am working on the above referenced appraisal.

I am requesting you to provide any additional information you would like to be considered in the appraisal of the subject property. Please supply any information you would like me to consider within 2 business days as well as a supporting summary and analysis of the information.

Please contact me with any questions you may have.

Sincerely,

XXXXX

That is a rough try on a good response to an ROV.

Sounds more like you are inviting an ROV, not responding to one

 

[Zoe]

Sounds more like you are inviting an ROV, not responding to one

I think the ROV is already in place with original poster. I knew you were paying attention. LOL

 

[Terry Caldwell]

Did you ask the buyer, selller, or realtors involved why the contract price is so much higher than list? That information could help in your summary.